Question 1

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the average-total-cost curve.

Accepted Answer

A) True 
 B)False

Question 2

Table 13-1
 
-Refer to Table 13-1.What is total output when 5 workers are hired?

Accepted Answer

A)   -10
B)   120
C)   160
D)   190E) B) and C)
F) A) and D)

Question 3

Table 13-7
The Flying Elvis Copter Rides
 
-Refer to Table 13-7.What is the value of D?

Accepted Answer

A)   $25
B)   $50
C)   $100
D)   $200E) B) and C)
F) A) and C)

Question 4

For a firm,the relationship between the quantity of inputs and quantity of output is called the

Accepted Answer

A)   profit function.
B)   production function.
C)   total-cost function.
D)   quantity function.E) None of the above
F) A) and D)

Question 5

Daphne sells 300 glasses of lemonade at $0.50 each.Her total costs are $125.Her profits are

Accepted Answer

A)   $25.
B)   $124.50.
C)   $125.
D)   $150.E) A) and B)
F) A) and C)

Question 6

When a firm is able to put idle equipment to use by hiring another worker,

Accepted Answer

A)   variable costs will rise.
B)   variable costs will fall.
C)   fixed costs will fall.
D)   both fixed costs and variable costs will rise.E) A) and D)
F) B) and C)

Question 7

Table 13-1
 
-Refer to Table 13-1.The average total cost of producing 240 units is

Accepted Answer

A)   $0.13.
B)   $0.19.
C)   $0.32.
D)   $0.80.E) A) and D)
F) C) and D)

Question 8

Diseconomies of scale occur when a firm's

Accepted Answer

A)   marginal costs are constant as output increases.
B)   long-run average total costs are decreasing as output increases.
C)   long-run average total costs are increasing as output increases.
D)   marginal costs are equal to average total costs for all levels of output.E) All of the above
F) B) and C)

Question 9

Figure 13-3 
-Refer to Figure 13-3.The graph illustrates a typical

Accepted Answer

A)   total-cost curve.
B)   production function.
C)   production possibilities frontier.
D)   fixed-cost curve.E) None of the above
F) C) and D)

Question 10

A key difference between accountants and economists is their different treatment of the cost of capital.Does this cause an accountant's estimate of total costs to be higher or lower than an economist's estimate? Explain.

Accepted Answer

An accountant would not include the forg...

Question 11

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles. 
-Refer to Figure 13-9.At levels of output between M and N,the firm experiences

Accepted Answer

A)   economies of scale.
B)   diseconomies of scale.
C)   constant returns to scale.
D)   both the benefits of specialization and diminishing marginal productivity.E) A) and B)
F) None of the above

Question 12

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles. 
-Refer to Figure 13-9.The firm experiences constant returns to scale at which output levels?

Accepted Answer

A)   output levels less than M
B)   output levels between M and N
C)   output levels greater than N
D)   All of the above are correct as long as the firm is operating in the long run.E) A) and B)
F) All of the above

Question 13

Table 13-8
 
-Refer to Table 13-8.What is the marginal cost of producing the fifth unit of output?

Accepted Answer

A)   $4
B)   $40
C)   $50
D)   $70E) C) and D)
F) B) and C)

Question 14

Which of the following expressions is correct?

Accepted Answer

A)   marginal cost = (change in quantity of output) /(change in total cost) 
B)   average total cost = (total cost) /(quantity of output) 
C)   total cost = variable cost + marginal cost
D)   average variable cost = (quantity of output) /(total variable cost) E) A) and B)
F) A) and C)

Question 15

Zach has decided to start his own photography studio.To purchase the necessary equipment,Zach withdrew $10,000 from his savings account,which was earning 3% interest,and borrowed an additional $5,000 from the bank at an interest rate of 8%.What is Zach's annual opportunity cost of the financial capital that has been invested in the business?

Accepted Answer

A)   $300
B)   $400
C)   $700
D)   $1,650E) All of the above
F) A) and B)

Question 16

A firm produces 300 units of output at a total cost of $1,000.If fixed costs are $100,

Accepted Answer

A)   average fixed cost is $10.
B)   average variable cost is $3.
C)   average total cost is $4.
D)   average total cost is $5.E) C) and D)
F) B) and C)

Question 17

Assume Jack received all As in his classes last semester.If Jack gets all Bs in his classes this semester,his GPA may or may not fall.

Accepted Answer

A) True 
 B)False

Question 18

Suppose that a firm has only one variable input,labor,and firm output is zero when labor is zero.When the firm hires 6 workers it produces 90 units of output.Fixed cost of production are $6 and the variable cost per unit of labor is $10.The marginal product of the seventh unit of labor is 4.Given this information,what is the total cost of production when the firm hires 7 workers?

Accepted Answer

A)   $66
B)   $76
C)   $906
D)   $946E) A) and B)
F) B) and C)

Question 19

Gloria has decided to start her own snow removal business.To purchase the necessary equipment,Gloria withdrew $2,000 from her savings account,which was earning 3% interest,and borrowed an additional $4,000 from the bank at an interest rate of 7%.What is Gloria's annual opportunity cost of the financial capital that has been invested in the business?

Accepted Answer

A)   $60
B)   $280
C)   $340
D)   $660E) A) and C)
F) All of the above

Question 20

At what level of output will average variable cost equal average total cost?

Accepted Answer

A)   when marginal cost equals average total cost
B)   for all levels of output in which average variable cost is falling
C)   when marginal cost equals average variable cost
D)   There is no level of output where this occurs,as long as fixed costs are positive.E) A) and B)
F) A) and C)

Exam 13: The Costs of Production

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.At levels of output between M and N,the firm experiences

Correct Answer
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Diseconomies of scale occur when a firm's

Correct Answer
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When a firm is able to put idle equipment to use by hiring another worker,

Correct Answer
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Table 13-1 -Refer to Table 13-1.What is total output when 5 workers are hired?

Correct Answer
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Figure 13-3 -Refer to Figure 13-3.The graph illustrates a typical

Correct Answer
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For a firm,the relationship between the quantity of inputs and quantity of output is called the

Correct Answer
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Which of the following expressions is correct?

Correct Answer
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Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7.What is the value of D?

Correct Answer
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Table 13-8 -Refer to Table 13-8.What is the marginal cost of producing the fifth unit of output?

Correct Answer
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Assume Jack received all As in his classes last semester.If Jack gets all Bs in his classes this semester,his GPA may or may not fall.

Correct Answer
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Table 13-1 -Refer to Table 13-1.The average total cost of producing 240 units is

Correct Answer
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At what level of output will average variable cost equal average total cost?

Correct Answer
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Daphne sells 300 glasses of lemonade at $0.50 each.Her total costs are $125.Her profits are

Correct Answer
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Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.The firm experiences constant returns to scale at which output levels?

Correct Answer
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A key difference between accountants and economists is their different treatment of the cost of capital.Does this cause an accountant's estimate of total costs to be higher or lower than an economist's estimate? Explain.

Correct Answer
verified
An accountant would not include the forg...
View Answer

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the average-total-cost curve.

Correct Answer
verified

A firm produces 300 units of output at a total cost of $1,000.If fixed costs are $100,

Correct Answer
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Exam 13: The Costs of Production

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.At levels of output between M and N,the firm experiences

Correct AnswerverifiedShow Answer

Diseconomies of scale occur when a firm's

Correct AnswerverifiedShow Answer

When a firm is able to put idle equipment to use by hiring another worker,

Correct AnswerverifiedShow Answer

Table 13-1 -Refer to Table 13-1.What is total output when 5 workers are hired?

Correct AnswerverifiedShow Answer

Figure 13-3 -Refer to Figure 13-3.The graph illustrates a typical

Correct AnswerverifiedShow Answer

For a firm,the relationship between the quantity of inputs and quantity of output is called the

Correct AnswerverifiedShow Answer

Which of the following expressions is correct?

Correct AnswerverifiedShow Answer

Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7.What is the value of D?

Correct AnswerverifiedShow Answer

Table 13-8 -Refer to Table 13-8.What is the marginal cost of producing the fifth unit of output?

Correct AnswerverifiedShow Answer

Assume Jack received all As in his classes last semester.If Jack gets all Bs in his classes this semester,his GPA may or may not fall.

Correct AnswerverifiedShow Answer

Table 13-1 -Refer to Table 13-1.The average total cost of producing 240 units is

Correct AnswerverifiedShow Answer

At what level of output will average variable cost equal average total cost?

Correct AnswerverifiedShow Answer

Daphne sells 300 glasses of lemonade at $0.50 each.Her total costs are $125.Her profits are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.The firm experiences constant returns to scale at which output levels?

Correct AnswerverifiedShow Answer

A key difference between accountants and economists is their different treatment of the cost of capital.Does this cause an accountant's estimate of total costs to be higher or lower than an economist's estimate? Explain.

Correct AnswerverifiedAn accountant would not include the forg...View AnswerShow Answer

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the average-total-cost curve.

Correct AnswerverifiedShow Answer

A firm produces 300 units of output at a total cost of $1,000.If fixed costs are $100,

Correct AnswerverifiedShow Answer

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An accountant would not include the forg...
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